Should U.s. Yards Take Ghost Fleet?

Maritime Administrator Says Ships Shouldn't Be Sold Abroad

June 10, 2000|By DAVID LERMAN Washington Bureau

WASHINGTON — The head of the Maritime Administration said on Friday that he favored paying domestic shipyards to scrap decrepit, contaminated ships that were becoming environmental hazards in the James River and other U.S. waterways.

John Graykowski, the acting maritime administrator, told a congressional panel that the controversial practice of selling ships overseas for scrap should be considered only as a "last resort" because of the environmental damage suffered by Third World countries, among other reasons.

Graykowski told a House budget subcommittee, "I believe innately we can do it better."

How to dispose of 114 obsolete government ships, including 61 in the James River "ghost fleet," has become a vexing question for federal bureaucrats and lawmakers.

While developing nations such as India are eager for the work - and will pay the United States for the scrap steel - federal officials stopped all overseas sales in 1994 because of environmental concerns. The contaminated ships, some of which are 50 years old, contain PCBs that are subject to export restrictions under the Toxic Substances Control Act.

At the same time, stringent environmental regulations and the low U.S. price for scrap steel have made the domestic ship-scrapping business unprofitable.

As a result, many of the ships have been piling up with nowhere to go, becoming floating environmental hazards full of PCBs, asbestos and lead-based paint. The number of obsolete ships has nearly doubled in the last two years alone, with the inventory expected to grow to 155 ships by the fall of 2001.

Graykowski's apparent push for subsidizing domestic ship-scrapping runs counter to the efforts of Rep. Herbert H. Bateman, R-Newport News, and other lawmakers hoping to end a six-year ban on sales to Third World nations.

Bateman inserted language into the House defense authorization bill that urges the Maritime Administration to resume overseas scrapping "to the maximum extent possible."

Sen. John McCain, R-Ariz., introduced a bill requiring the sale of 39 of the most contaminated ships to foreign countries.

But elsewhere in Congress, support is building to pay U.S. yards to take on the work, both for environmental reasons and to preserve U.S. jobs in the often-struggling ship-repair industry.

Rep. Peter DeFazio, D-Ore., is pushing to create a pilot program that would offer $40 million a year for domestic yards. Sen. Barbara Mikulski, D-Md., is waging a similar effort in the Senate, and Sen. Ted Stevens, R-Alaska, inserted about $10 million into the Senate defense appropriations bill for domestic ship-scrapping.

"It seems stupid that we don't develop our own program in this country," said Rep. Darlene Hooley, D-Ore., a member of the House Budget subcommittee on housing and infrastructure, which held a hearing on the issue Friday.

"It's costing us so much money to store these ships right now. We could be dismantling them and putting people to work."

By all accounts, the cost of doing nothing is mounting. Last year, Graykowski said, his agency had to spend $3 million just to maintain the aging ships. In 1998, the Export Challenger, a ship in the James River reserve fleet, began leaking oil, prompting a $1.3 million cleanup.

But the cost of scrapping the ships at U.S. yards is far less clear.

The Maritime Administration has estimated the work could cost $500 million to $1 billion. Rep. John Sununu, R-N.H., chairman of the House subcommittee, said the price could reach as high as $2 billion, but offered no detail. Several private shipyards interested in scrapping have said those estimates are greatly exaggerated.

The Maritime Administration is working with the Environmental Protection Agency on guidelines that would allow some foreign sales if most PCBs are removed.

But Graykowski warned the pending agreement may not prove useful in most cases. The extensive work required in removing PCBs, he said, can make the old ships unseaworthy.

And the agreement would require the United States to notify foreign governments that the ships remain environmental hazards - a provision that he said could make many sales politically difficult.

David Lerman can be reached at (202) 824-8224 or by e-mail at dlerman@tribune.com